Fiscal aims and austerity: the parties’ plans compared

Each of the three main UK political parties has stated an objective for reducing borrowing over the next parliament. Somewhat oddly, each of these targets would allow a looser fiscal position in the medium-term than is currently planned by the coalition government. However, the coalition government’s ‘plans’ are predicated on a large, as yet unspecified, spending cut. Therefore, while each of parties could meet their fiscal targets while running slightly looser fiscal policy that planned by the coalition government, they would still need to announce further details of net tax increases, cuts to social security spending, or further cuts to departmental budgets in order to make their sums add up. This briefing note describes each of the three main parties' proposed fiscal targets and sets out the trade-offs that each of the parties face between tax increases, benefit cuts, and cuts to departmental spending.